Royal Dutch Shell on Thursday announced the sale of two onshore U.S. shale gas assets in exchange for $2.1 billion and acreage in different gas-rich areas as the energy company restructures its North America business and reins in costs.
Shell agreed to sell to Ultra Petroleum its relatively mature natural gas-producing properties in Wyoming’s Pinedale field, a total of 155,000 acres, in a step which will mark its complete exit from one of its first U.S. shale investments in 2001.
Ultra will pay Shell $925 million in cash and give it acreage in the oil and gas-rich Marcellus and Utica fields in Pennsylvania and Ohio, respectively.
The Anglo-Dutch company will also sell its 107,000 acre Haynesville field in north Louisiana for about $1.2 billion in cash to Dallas, Texas-based explorer Vine Oil & Gas LP and its partner, investment fund Blackstone Group LP.
“We continue to restructure and focus our North America shale oil and gas portfolio to deliver the most value in the longer term,” said Marvin Odum, Shell’s Upstream Americas Director.
In the second quarter of 2014, Shell produced 190 million cubic feet per day (mcf/d) of natural gas from Pinedale. The Haynesville gas production reached 700 mcf/d as of July 1, Shell said.
Shell, like many other global oil companies, is carrying out a broad cost-cutting drive aimed at boosting profits. Chief Executive Ben van Beurden is seeking to offload $15 billion-worth of assets by the end of 2015, including in North America.
The company has focused on selling gas assets where development costs are high while revenues are relatively low compared with the oil sector, especially as natural gas prices around the world have dropped sharply this year.
Shell’s shares were up 0.73 percent at 1448 GMT.